nep-soc New Economics Papers
on Social Norms and Social Capital
Issue of 2007‒02‒03
eleven papers chosen by
Fabio Sabatini
Universita degli Studi di Roma, La Sapienza

  1. Cross-Country Determinants of Life Satisfaction: Exploring Different Determinants across Groups in Society By Christian Bjørnskova; Axel Dreher; Justina A.V. Fischer
  2. Corporate Social Responsibility and Managerial Entrenchment By Giovanni Cespa; Giacinta Cestone
  3. Are Job Networks Localized in a Developing Economy? Search Methods for Displaced Workers in Thailand By Machikita, Tomohiro
  4. Influence of Social Institutions on Inequality in China By Uchimura, Hiroko
  5. Distribution System of China's Industrial Clusters: Case Study of Yiwu China Commodity City By DING, Ke
  6. Knowing What Others Know: Coordination Motives in Information Acquisition By Laura Veldkamp; Christian Hellwig
  7. Structural Changes and Formation of RÅ«stÄ-shahr in Post-Revolutionary Rural Society in Iran By Suzuki, Hitoshi
  8. A Model of Reciprocal Fairness: Application to the Labour Contract By Stéphane Mahuteau
  9. Peasantry and Bureaucracy in Decentralization in Bhutan By Ura, Karma
  10. Crime and Uncertain Punishment By Barbara G. Katz; Joel Owen
  11. Does Microfinance Form a Distinctive Asset Class? Preliminary Evidence By Ingo Walter; Nicolas Krauss

  1. By: Christian Bjørnskova (Aarhus School of Business); Axel Dreher (Department of Management, Technology, and Economics, ETH Zurich); Justina A.V. Fischer (STICERD, London School of Economics)
    Abstract: This paper explores a wide range of cross-country determinants of life satisfaction exploiting a database of 90,000 observations in 70 countries. We distinguish four groups of aggregate variables as potential determinants of satisfaction: political, economic, institutional, and human development and culture. We use ordered probit to investigate the importance of these variables on individual life satisfaction and test the robustness of our results with Extreme Bounds Analysis. The results show that only a small number of factors, such as openness, business climate, postcommunism, the number of chambers in parliament, Christian majority, and infant mortality robustly influence life satisfaction across countries while the importance of many variables suggested in the previous literature is not confirmed. This remains largely true when the analysis splits national populations according to gender, income and political orientation also.
    Keywords: Life Satisfaction, Happiness, Institutions, Extreme Bounds Analysis
    JEL: I31 H10 H40
    Date: 2006–08
  2. By: Giovanni Cespa (University of Salerno, CSEF and CEPR); Giacinta Cestone (University of Salerno, CSEF and CEPR)
    Abstract: When stakeholder protection is left to the voluntary initiative of managers, relations with social activists may become an effective entrenchment strategy for inefficient CEOs. We thus argue that managerial turnover and firm value are increased when explicit stakeholder protection is introduced so as to deprive incumbent CEOs of activists’ support. This finding provides a rationale for the emergence of specialized institutions (social auditors and ethic indexes) that help firms commit to stakeholder protection even in case of managerial replacement. Our theory also explains a recent trend whereby social activist organizations and institutional shareholders are showing a growing support for each others’ agenda
    Keywords: Corporate Governance, Corporate Social Responsibility, Managerial Entrenchment, Social Activism, Stakeholders
    JEL: G34 G38
    Date: 2007–01–01
  3. By: Machikita, Tomohiro
    Abstract: Effects of localized personal networks on the choice of search methods are studied in this paper using evidence of displaced workers by establishment closure in Thailand Labor Force Survey, 2001. For the blocks/villages level, there is less significant evidence of local interactions between job-seekers and referrals in developing labor markets. The effects of localized personal networks do not play an important role in the probability of unemployed job-seekers seeking assistance from friends and relatives. Convincing evidence from the data supports the proposition that both self-selection of individual background-like professions and access to large markets determine the choice of job search method.
    Keywords: Local Interactions, Job Search Methods, Referrals, Asymmetric Information, Thailand, Unemployment, Labor market, Network
    JEL: C21 J63 J64 O18
    Date: 2007–01
  4. By: Uchimura, Hiroko
    Abstract: This study analyses the impact of changes in social institutions, i.e. in the informal and formal social security system, on income inequality in China. This study uses an inequality decomposition analysis approach comparing household survey data for 1988 with 1995.Three main results emerge from the analysis: first, it findsthat the family based social security is losing its importance mainly through the changes in employment pattern in a household. This change contributes to rising income inequality. Second, thestudy shows that the introduction of new formal social security system helped to equalise the distribution of retired household members' income in urban areas in 1995. Third, however, these changes have only benefited a restricted number of persons. Benefits for rural migrants are low and most of the rural population has still no access to the new system.
    Keywords: Income Inequality, Social Institutions, Family, Social Security, Household, Income distribution, China
    JEL: D31 O15 P20
    Date: 2006–10
  5. By: DING, Ke
    Abstract: This paper discusses the issue of upgrading industrial clusters from the perspective of external linkages. It is taken for granted that in most developing countries, due to the limited domestic market and poor traditional commercial networks, industrial clusters are able to upgrade only when they are involved in global value chains. However, the rise of China’s industrial clusters challenges this view. Historically, China has had a lot of industrial clusters with their own traditional commercial networks. This fact combined with its huge population resulted in the formation of a unique external linage to China’s industrial clusters after the socialist planning period ended. In concrete terms, since the 1980s, a traditional commercial institution . the transaction market . began to appear in most clusters. These markets within the clusters get connected to those in the cities due to interaction between traditional merchants and local governments. This has resulted in the formation of a powerful market network-based distribution system which has played a crucial role for China’s industrial clusters in responding to exploding domestic demand. This paper explains these features in detail, using Yiwu China Commodity City as a case study.
    Keywords: Industrial cluster, Transaction market, Merchants, Network, Yiwu, Distribution, Industrial structure, Commerce, Market, China
    JEL: L67 L81 O14 O53
    Date: 2006–10
  6. By: Laura Veldkamp; Christian Hellwig
    Date: 2006
  7. By: Suzuki, Hitoshi
    Abstract: The following paper is based on the author's two-year research and fieldwork in Iran and examines the process of political and social changes since the Iranian Revolution of 1979 and the subsequent impact of the Iran-Iraq War of 1980-88. This paper focuses on the transition of traditional, small villages into rÅ«stÄ-shahr or small rural cities and the first and second nation-wide elections of shourÄ or councils which were the first steps toward self-government. The author is guardedly optimistic regarding this democratic process but warns of possible future social unrest if changes are not more “balanced†between cities and rural areas and if the employment needs of the burgeoning younger generation are not met, political and social consequences may be catastrophic.
    Keywords: Iran, Rural society (societies), Social transformation, Local election, Democratization, Politics, Rural development, Social change, Elections
    Date: 2006–10
  8. By: Stéphane Mahuteau (Department of Economics, Macquarie University)
    Abstract: We investigate to what extent reciprocity, exhibited by employers and employees, lead to stable gift exchange practices in the labour contract, giving rise to non-compensating wage differentials among industries and firms. We use the concept of Sequential Reciprocity Equilibrium (Dufwenberg and Kirchsteiger 1998, 2004) to incorporate players’ preferences for reciprocity in their utility function. We show that successful gift exchange practices may arise if both players actually care for reciprocity. We test the predictions of the model using a matched employer-employee French dataset. Our results show that French employers and employees’ decisions are influenced by reciprocity concerns.
    Keywords: reciprocity, fairness, sequential game, cheap-talk, efficiency wages
    JEL: C72 J33 J41
    Date: 2006–11
  9. By: Ura, Karma
    Abstract: Decentralization process became prominent in Bhutan since early 1980s. Starting with an account of historical precedents for decentralized authority, the paper gives theoretical perspectives and factual descriptions of this process. Limiting itself to a discussion of broader social and political issues, the paper interprets decentralization as an approach towards diversity and pluralism among different communities that is shaped as a dynamics between peasants and civil servants.
    Keywords: Autonomy, Power, Agency, Participation, Knowledge, Buddhist perspective, Decentralization, Peasantry, Bureaucracy, Bhutan
    Date: 2006–10
  10. By: Barbara G. Katz; Joel Owen
    Date: 2006
  11. By: Ingo Walter; Nicolas Krauss
    Date: 2006

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